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Zelensky's reforms: What 'servants of people' want to change in Ukraine?

Author : Serhiy Fursa

If the new reforms reforms are successfully implemented, then we will finish the IMF program ahead of schedule
21:50, 5 September 2019

Volodymyr Zelensky, the President of Ukraine
Reuters

A monopower meeting under the leadership of the president took place, and plans for reforming Ukraine were outlined during it. It is hard to say what a miracle happened before. But populism has disappeared with the end of the elections, and now plans that the Ukrainian economy has long needed are voiced.

And there are those plans which investors have long been waiting for. And the entire leadership of Ukraine has signed them up. It’s difficult to understand how this became possible. It's some kind of magic.

And yes, if these reforms are implemented, then we will finish the IMF program ahead of schedule. The dreams of opponents of reform when we no longer need the IMF will just come true. As they said, for this to happen, you just need to carry out reforms and improve the economy.

Unless, of course, a global crisis occurs. But this is an event that is completely independent of us. And the main goal is not to do anything to destroy our macroeconomic stability and cooperation with the Fund now. And here we send greetings to the district administrative court and Igor Kolomoisky. So far, the only "black swan" that may appear in Ukraine.

The key reforms that has been outlined:

1. The land market. The bill is due to be drafted and adopted this year. This is a very positive and long awaited reform. Of course, if its model is convenient and with minimal restrictions. Otherwise, the effect on the economy will be minimal.

In the case of the liberal reform implementation, we can get an effect in an additional two percent of GDP growth annually. Moreover, this reform can be the very long-awaited signal to investors. As it was the privatization of Kryvorizhstal, after which investors lined up in Boryspil airport.

2. The concession law and pilot projects for the concession of two ports. This is well and long awaited documents. Both as a way to attract investors and as an element of the fight against corruption.

3. Split Law. The law will finally allow the National Bank to regulate the insurance market, where all dirty schemes went after the banking sector was cleared. The law has been in parliament for more than two years and was gathering dust, because the defenders of the schemes did not allow getting to Augean stables of the financial market.

4. Intensification of large privatization. It is important. Although there will be a question whether we will find buyers for the proposed assets. Unfortunately, many of the enterprises are already overexposed. On the other hand, the list of facilities available for privatization is expanding, which is good.

5. Law on the Financial Investigation Service. The most important change. Security officials are the biggest problem for entrepreneurs and investors along with the courts. And it would be very correct to make sure that all of these law enforces did not have the right to approach business. And not only Security Service, but also policemen, prosecutors and zombies from a covered tax police.

Related: Economy avenges mistakes and miscalculations of Ukrainian politicians


6. Complete liberalization of the foreign exchange market. Just good. And continue the existing process.

7. Strengthening the ProZorro system. What is called a "second procurement revolution." Now it’s possible to close the holes that the “decision-makers” thought out for themselves and expand the system for renting state property. There is no need to even explain why this is important and good.

8. Legalization of gambling. A huge shadow stream should be brought to light. It should be about a casino in five-star hotels, as well as "massive gambling" and bookmaking. In the end, after the prohibition of gambling all of these lotteries began to appear in every gateway.

And everything is simple - paying a policeman or a prosecutor is cheaper than paying taxes. And, of course, it would be fantastic to end this with the creation of Ukrainian Las Vegas near Odesa. This is a great national project.

9. Legalization of amber mining. You can curse the officials as much as you like and shuffle them, but this will only change the name of the person receiving bribes from illegal diggers. Therefore, the only way to restore order in this area is to legalize production.

And these are just the main points. Unfortunately, so far there is only talk of customs reform, but no fiscalization steps have been announced. Maybe because this is precisely the reform that could cause great protests, because it removes from the shadows a large number of processes and money that many people get. But it is important that such a bill is developed and submitted to the government.

It is also important to say that we have not heard about a number of dangerous innovations that would have a doubtful effect on the economy and would be detrimental to cooperation with the IMF. No one lowers tariffs by administrative methods, they forgot about the tax on the withdrawn capital and have so far don’t mention the amnesty of capital.

Now it just remains to wait for how this will be implemented. And I would like that the rules were not violated, including in the parliament. Reforms that must establish the rule of law cannot be done in violation of laws. This does not work. And the lack of the rule of law now remains the main problem of Ukraine.

Therefore, it is so good to hear about a new judicial reform. And it is so important that it is finally real. But real judicial reform should establish the rule of law and cannot be based on lawlessness.

Related: Ukraine pays out 1.1 billion dollars on Eurobonds, - National Bank

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